Can I File for Bankruptcy if I Am Not Behind on Payments?

April 17, 2026

There is a common misconception that one can only file for bankruptcy after they have fallen behind on payments of their debt. Although this is the most common scenario in which one may file for bankruptcy, it is not a requirement that you are behind on your payments to become eligible to seek bankruptcy protection. You may consider proactively filing for bankruptcy if making all of the payments due becomes too onerous and leaves you in a position in which you are not able to pay your living expenses. However, there are trade-offs involved when you file for Chapter 7 bankruptcy.

When You Can File for Chapter 7 Bankruptcy

You may be current on all of your payments, but you still find yourself in a precarious financial situation. Doing so may mean that you need to drain all of your savings, or you are not able to keep up with your basic living expenses. There is no outright requirement for you to be behind on payments to avail yourself of bankruptcy protection. Under federal bankruptcy law, you would need to meet one of the two following conditions to make a bankruptcy filing:

 

• You have no realistic prospects of keeping up with your debt payments
• Making payments on your debt would leave you unable to meet your living expenses

You May File for Bankruptcy Strategically

You may be in a situation in which you are able to make payments as they come due, but you will not realistically be able to do so in the future. You may find yourself either draining your savings or having to sell possessions to make the regular payments on your debt. Given the amount of money that you owe, you may find yourself in the proverbial situation of “robbing Peter to pay Paul” to make debt payments. At some point, your ability to do so may run out entirely.

There is such a thing as a strategic filing for bankruptcy that can help secure your financial future. Even if your credit is not currently taking a hit, or if you are not subject to collection actions, you may find yourself in that situation imminently. There is a chance that you may be able to file for bankruptcy to prevent these occurrences from happening in the near future.  If you are able to meet the means test for Chapter 7 bankruptcy, you may be able to receive discharge of your unsecured debts at the conclusion of the process.

Filing for Bankruptcy Does Come at a Cost

However, although you may consider proactively filing for bankruptcy, you must also be aware of the potential ramifications. There are certain trade-offs that you must make in order to receive debt discharge. For example, Chapter 7 bankruptcy requires that you surrender property that is not subject to an exemption to the bankruptcy trustee so that they can use it to pay your creditors. In addition, even if your credit is not yet damaged, it will be for a prolonged amount of time if you have a bankruptcy filing on your record.

Nevertheless, you should review your financial situation with a bankruptcy lawyer to determine whether now is the right time to act. There are requirements that you need to meet before you can file for bankruptcy, such as taking a mandatory credit counseling class, which you may want to begin fulfilling now. This way, you are in a position to file for bankruptcy in the future if that is the right time for you to do so.

Baltimore Bankruptcy Lawyers at LeViness, Tolzman & Hamilton Will Help You Make a Proper Decision

If you are considering bankruptcy, the Baltimore bankruptcy lawyers at LeViness, Tolzman & Hamilton can help you to determine whether seeking protection under Chapter 7 is the right financial move for you. Take the first step towards gaining more control over your financial destiny by scheduling a free initial consultation. Visit our website or call us today at 800-547-4LAW (4529). We have offices in Baltimore and Owings Mills, MD, and we serve clients in the surrounding areas.